Rhode Island Passes New Gaming Agreement With Bally’s Corporation, IGT

By | June 2, 2021

The Rhode Island General Assembly has approved legislation that extends the state’s gaming partnerships with the Bally’s Corporation and IGT.

Rhode Island Lottery IGT Bally's
A woman plays a slot machine at the Twin River Casino in Rhode Island earlier this year. Rhode Island lawmakers have passed legislation that would extend casino privileges to Bally’s and IGT’s deal to operate the state lottery. (Image: The Providence Journal)

Yesterday, the state Senate voted 28-7 in favor of carrying on with its relationship with the casino operator and gaming manufacturer and lottery operator. The chamber’s vote followed the House’s backing of the legislation last month.

The bill extends IGT’s exclusive control of the Rhode Island Lottery through 2043. IGT pledges to maintain an employee workforce of at least 1,100 people during that time, and must additionally complete a one-time $27 million payment to the state for the 20-year lottery extension.

Bally’s will retain its monopoly on casino gambling in the state through 2036. In exchange, it will invest at least $100 million into its flagship Twin River Casino in Lincoln. 

The legislation increases revenue to our state and preserves critical jobs,” said House Speaker K. Joseph Shekarchi (D-Dist. 23, Warwick). “Along with the Senate, we have taken several steps to enhance the legislation on behalf of the taxpayers.”

Casinos and lottery gaming represent the third-largest source of tax revenue in Rhode Island. Gross gaming revenue at the two Bally’s casinos is taxed as high as 74 percent. 

The Rhode Island Lottery transferred $293.9 million to the state’s General Fund in the 2020 fiscal year. Prior to the pandemic, that number was nearly $400 million in FY 2019.

Not Slots, But VLTs

Rhode Island passed legislation in 1992 to allow for commercial casino gambling at the state’s two pari-mutuel wagering venues. However, the bill only authorized video lottery terminals (VLTs), which are similar to slots but have outcomes produced by a centralized computer system — not a unique random number generator. 

IGT, being the operator of the Rhode Island Lottery, was afforded the right to place its own machines inside the casinos. The law says each casino must allow IGT to operate up to 50 percent of the gaming devices.

However, when IGT merged with Gtech in 2006, the company’s presence on the Rhode Island casinos ballooned far above that 50 percent threshold.

Twin River Worldwide Holdings (TRWH), now known as Bally’s following Twin River’s acquisition last year of the brand from Caesars Entertainment, owns and operates Twin River in Lincoln and the Tiverton Casino Hotel. TRWH argued in recent years during IGT contract discussions that allowing the gaming manufacturer to control its casino floors is bad for the state. The casinos added that the IGT video gaming machines “do not stack up competitively.”

“They are under-performing compared to machines from the state’s two other VLT vendors,” then-Twin River said. “More than 1,800 of their machines are more than a decade old. Their competition, Scientific Games, has made considerably more investment.”

Foes to Friends

Under the bill passed this week, Bally’s and IGT are to form a joint venture, the new company being responsible for supplying all of the gaming machines on the casino floors. IGT will hold a 60 percent stake in the firm, and Bally’s the remaining 40 percent. 

The entity is to use IGT machines, plus other VLT manufacturers, to offer casino gamblers an assortment of terminals. 

In addition, the law requires that at least six percent of the VLTs be replaced annually for new ones, and underperforming terminals are subjected to review by state officials for replacement or modification. 

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